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Instructional Guidelines

1. This form is required only for a DIFC Incorporated Insurer that undertakes Direct Long-Term Insurance Business, and is completed in respect only of Direct Long-Term Insurance Business.
2. When this form is presented as part of a Quarterly Regulatory Return, part III is not required to be completed.
3. This form provides the DFSA with quarterly and annual information on the makeup of Direct Long-Term Insurance premiums accounted for by a DIFC Incorporated Insurer, and new business underwritten, during the reporting period. When presented as part of the Annual Regulatory Return, it also provides information on persistency
4. Because this part of the form is required only in the case of an Annual Regulatory Return, the reporting periods covered in part III will only ever be financial years. The form will disclose the persistency rate (the contracts remaining in force expressed as a percentage of those written, less those terminating naturally) for the most recent financial year at the end of twelve months, and the three financial years beforehand at the end of, respectively, twenty-four, thirty-six and forty-eight months.
5. Normally in part III, the disclosure in column 1 for the previous financial year will be equal to that for the then current year in the previous year’s Return, and in a similar fashion the disclosure in column 1 for the year before the previous financial year will be equal to that for previous financial year, in the previous year’s Return, and so on. This may not be the case if a portfolio of policies in force is acquired or disposed of by the Insurer. Where this occurs, the figures for contracts affected should be adjusted as though the contracts acquired had been affected by the Insurer at the time they were first affected, and the contracts disposed of had never been affected by the Insurer. Where this is the case, the provision of particulars in a Supplementary Note will assist the DFSA’s understanding
6. On this form, reinsurance is classified according to the underlying premiums accepted by the Insurer, not on the basis of the form of the reinsurance contract. Thus, a reinsurance of a regular premium policy is classified in column 1 or 3, regardless of the form of the reinsurance contract
7. On this form:
a ‘regular premiums’ means premiums payable at regular intervals during the term of the contract;
b ‘single premiums’ means premiums that are not regular premiums. An additional premium payable on an existing regular premium contract is not a regular premium unless it constitutes one in a series of regular premiums;
c ‘new business’ means premiums on new contracts of insurance effected during the reporting period, together with additional premiums paid on existing contracts where those additional premiums have the characteristic of new business rather than representing a payment due on the original contract; and
d ‘new policyholders/fund members’ means policyholders who have effected a new contract of insurance during the reporting year or (in the case of Class VII business) persons who have joined a pension fund that is the subject of a contract of insurance in that Class, during the reporting year.
8. On this form, items 28 to 51 must be presented in whole numbers, not rounded, and with no decimal place.
9. An Insurer must present at items 1 to 7, for each Class of Business, analysed across columns 1 to 4 between participating business and non-participating business and between regular premium business and single premium business, the gross Direct Long-Term Insurance Business premiums that it has accounted for in the reporting period.
10. An Insurer must present at item 9 the total amount included in item 8 that represents premiums receivable from Related parties of the Insurer, for each of columns 1 to 4.
11. An Insurer must present at items 10 to 16, for each Class of Business, the reinsurance premiums that it has accounted for as ceded in the reporting period, in respect of the premiums reported at items 1 to 7. Items 10 to 16 must be analysed across columns 1 to 4 according to the type of the underlying premium, namely participating and non-participating, and regular premium and single premium.
12. An Insurer must present at item 18 the total amount included in item 17 that represents reinsurance premiums ceded to Related parties of the Insurer, for each of columns 1 to 4.
13. Where an Insurer is required to complete this form, Column 5 of this form for items 1 to 18 must agree to column 1 of form PRU PIN4 for items 21 to 38 respectively.
14. An Insurer must present at items 19 to 26, for each Class of Business, analysed across columns 1 to 4 between participating business and non-participating business and between regular premium business and single premium business, the gross Direct Long-Term Insurance new business premiums that it has accounted for in the reporting period. For the purposes of this disclosure, Class I is separated into two items: item 19 being annuities, and item 20 being Class I other than annuities.
15. An Insurer must present at items 28 to 35, for each Class of Business, analysed across columns 1 to 4 between participating business and non-participating business and between regular premium business and single premium business, the new policyholders/fund members that it recorded in the reporting period. For the purposes of this disclosure, Class I is separated into two items: item 19 being annuities, and item 20 being Class I other than annuities.
16. An Insurer must present at item 37 for the reporting period and items 38, 39 and 40 respectively for the previous reporting period and the two immediately prior to that (in each case, the ‘reporting year in question’), the following information in respect of participating long-term contracts of insurance:
a in column 1, the number of Direct Long-Term Insurance contracts effected during the reporting period in question;
b in column 2, the number of contracts effected during the reporting period in question that have, during the period from their inception up to the reporting date, terminated through expiry of the contract term, through occurrence of the insured event, or otherwise through an event contemplated in the policy document other than lapse, surrender or cancellation;
c in column 3, the number of contracts effected during the reporting period that have, during the period from their inception up to the reporting date, terminated through lapse, surrender, or cancellation or otherwise through an event not contemplated in the policy document;
d in column 4, the number of contracts (calculated as the figure in column 1 less the sum of the two figures in columns 2 and 3) remaining in force on the reporting date; and
e in column 5, the persistency rate, calculated as the figure in column 4 divided by the figure in column 1 less the figure in column 2, expressed as a percentage.
17. An Insurer must present at item 42 for the reporting period and items 43, 44 and 45 respectively for the previous reporting period and the two immediately prior to that (in each case, the ‘reporting year in question’), the information set out in instructional guideline 16(a) to (c), in respect of linked long-term contracts of insurance.
18. An Insurer must present at item 47 for the reporting period and items 48, 49 and 50 respectively for the previous reporting period and the two immediately prior to that (in each case, the ‘reporting year in question’), the information set out in instructional guideline 16(a) to (c), in respect of longterm contracts of insurance not already included in the disclosures under participating or linked long term contracts.
19. No figure is required to be presented in column 5 at item 41, item 46 or item 51.

[Added] DFSA GM2/2007 (Made 5 July 2007). [VER3/08-07]